Bassett 1Q Sales up 22%

April 12, 2011  by in UnCategorized   

By Home Furnishings Business in Financial Reports on April 13, 2011

Bassett Furniture Inds. (NASDAQ: BSET) reported Tuesday that first-quarter 2011 sales rose 22 percent to $64.3 million compared with the same period a year ago.

Bassett, Bassett, Va., largely credited the sales increase to a 14 percent increase in total wholesale shipments and increased sales at retail due primarily to additional company-owned stores and a 7 percent increase in comparable store sales.

The company reported a net loss of $8.3 million, or $0.72 per share, for the first quarter, which ended Feb. 26, 2011,  compared with a net loss of $1.7 million, or $0.15 per share, first-quarter 2010.

The results for this year's first quarter included $6.4 million of bad debt and notes receivable valuation charges; $1.3 million of lease and loan guarantee expense associated with licensee store closures and takeovers; $0.9 million of asset impairment charges; $0.9 million of lease exit costs associated with the closure of five company-owned stores; $0.7 million of periodic costs associated with carrying idle retail facilities; and a $0.4 million gain on the settlement of two mortgages.

"Our weakest licensed and corporate Bassett Home Furnishings retail stores have been a drain on our operating results for the past several years," said Robert H. Spilman Jr., president and CEO. "The company has steadily addressed many of these situations by closing or acquiring stores. These efforts continue in 2011 as we assess the viability of all remaining stores. Driven by a 22 percent sales increase, the fundamentals of our business improved markedly on a year over year basis. However, the store by store appraisal process produced bad debt, lease termination, and restructuring charges that were responsible for our first quarter loss.

"Looking ahead, we may record charges of a similar nature and size in the second quarter. We look forward to then turning our full attention to effectively operating our corporate stores and strengthening the performance of many of the healthy licensed stores in our network."

As of Feb. 26, the total store network included 51 licensee-owned stores and 45 company-owned and operated stores. As noted, the company acquired certain assets of three previously-owned licensee stores during the first quarter. In addition, the company closed five underperforming stores during the quarter.

The company-owned stores had sales of $37 million in the first quarter of 2011, a 36.8 percent increase over the prior-year period. Comparable-store sales rose $1.6 million, or 7 percent.

In addition, Bassett expects to recognize pretax proceeds between $73 million and $75 million upon closing of the sale of the International Home Furnishings Center, which is expected to occur on or before April 29.